Nicolas Sarkozy, the French president, has been on a tour of the region [Reuters]

France has reached a deal with Gulf states to sell them civilian nuclear technology and has taken a step closer to establishing a permanent military base in the region.

While in the United Arab Emirates, Nicolas Sarkozy, the French president, signed an outline agreement to help provide peaceful nuclear energy. He is offering nuclear co-operation in return for billions of dollars.

During his regional tour he made similar overtures to Qatar and Saudi Arabia.

 

Sarkozy says he does not see why any Middle Eastern power - including Iran - should not produce atomic energy.

 

On the strategic front, France and Abu Dhabi have also sealed a deal for a French military base in the emirate, just across the Gulf from Iran.

 

Inside Story asks whether Sarkozy is showing Iran how best to handle its nuclear ambitions or whether France is taking advantage of the tensions?